Mumbai/New Delhi: The Enforcement Directorate (ED) on Wednesday said it has arrested a “close" associate and the vice president of a Nirav Modi firm for allegedly aiding in the laundering of over Rs5,900 crore in connection with the PNB fraud case.
Shyam Sunder Wadhwa, the vice president of Firestar Group, was arrested last night under the Prevention of Money Laundering Act (PMLA) in Mumbai, the Enforcement Directorate said in a statement. Wadhwa, a chartered accountant, was sent to seven days of ED custody by a special anti-money laundering court in Mumbai on Wednesday.
Wadhwa was described by the ED as a “close confidante" of Modi.
“He is in close touch with Modi and also involved in money laundering at the behest of and in aid of Modi," an official said. This is the ED’s first arrest in the PNB fraud.
According to ED, Wadhwa was instrumental in setting up two companies in Hong Kong (Ms Aura Gem and Ms Sino Traders) along with “dummy" directors and these firms “were used" for laundering proceed of crime and substantial amounts totalling Rs5,921 crore. These funds were routed from the LoUs (letters of undertaking) “fraudulently" issued by the PNB for the Nirav Modi group of companies—Ms Solar Exports, Ms Stellar Diamonds and Ms Diamonds R US, it said.
“Out of the funds so received, Ms Aura Gem has transferred an amount of Rs468 crore and Ms Sino Traders Rs506.69 crore to the said three companies and completed the process of laundering money," it said.
ED said Wadhwa’s custodial interrogation would help it in “unravelling the truth behind the scam". It alleged that he was trying to initially “mislead" the agency during interrogation but later confessed to doing the paperwork for creating the two firms and appointing “dummy" or fake directors in them.
The ED has filed two money-laundering FIRs against Modi and his uncle and Gitanjali Gems promoter Mehul Choksi to probe the alleged over Rs13,000 crore PNB fraud. It has conducted a total of 251 country-wide searches in the case after it began the criminal probe against the accused in February.
The total seizure and attachment of diamond, gold, precious and semi-precious stones and other movable and immovable assets in the case stand at Rs7,664 crore.